Shopee Exports 1.5 Million MSME Products to 6 Countries
Shopee said that it has exported 1.5 million local Micro, Small and Medium Enterprises (MSMEs) products to six countries. E-commerce companies say it is not easy to export.
There are five challenges that must be faced by MSMEs in exporting their products. The first challenge, namely logistics and operations.
“Because, the bigger the MSMEs, the more supplies they manage. It becomes more difficult,” said Director of Shopee Indonesia, Handhika Jahja, Tuesday (25/5).
So far, the exported goods cannot be directly entered and marketed in a country. Hence, Shopee created a warehousing system, so that it could enter the country.
The second challenge is related to payment. The currency of each country is different. To overcome this challenge, Shopee then created an escrow system. A legal document containing an agreement regarding assets.
Escrow is generally in the form of money that is temporarily deposited with a third party. Shopee creates joint accounts managed by third parties or escrow agents. The third challenge is the different languages used by each country.
To overcome this challenge, the company created a translator or translation feature on its platform. The fourth challenge is related to funding. According to Handhika, to speed up the process of graduating, MSMEs need a large amount of funding.
“Hence, we are working with other agencies to provide loan facilities,” he said. The fifth challenge, namely marketing. How do you make local MSME products known and reach buyers in other countries.
One of the ways that Shopee does with regard to this marketing is to embrace large MSMEs or corporations in order to include local MSMEs into its supply chain. That way, local UMKM products can be introduced in foreign markets.
Has Exported Products from Local MSMEs
To date, it has exported 1.5 million products from 180 thousand Indonesian MSMEs. Shopee has reached six export destination countries, namely Thailand, Vietnam, Malaysia, Singapore, the Philippines, and most recently the Brazilian market. Millions of products are exported through the Kreasi Kreasi Nusantara channel from Local to Global.
Shopee’s Head of Public Policy and Government Relations, Radityo Triatmojo, said that since the Covid-19 pandemic last year, export demand for local MSME products was quite high.
Radityo said Shopee is also aggressively engaging local MSMEs and expanding the export destination market abroad. The growth in the number of MSMEs exporting their products through Shopee is quite rapid. Shopee started the export program in 2019 by involving 10 MSMEs under its platform.
There are only thousands of products in the pilot project program. As of August 2020, it was recorded that 20 thousand MSMEs had exported their products through Shopee. Now, MSME products exported through Shopee have reached 1.5 million products.
Radityo said Shopee but also provides assistance to the MSMEs it fostered by collaborating with various ministries and institutions.
“We provide supplies such as product packaging and delivery methods,” he said. This e-commerce from Singapore selects partners who will take part in the Kreasi Nusantara program.
The criterion is that the partners must produce their own goods or are not resellers. Shopee will also review product quality and the readiness of partners to produce goods. In addition, the transaction history of the seller partner must be good.
Launched the Export Program for MSMEs
Shopee also launched a program entitled “500,000 New Exporters” which began in early March 2021 and is targeted for completion in 2030.
In carrying out the program, the company collaborates with various parties, Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM) and also Bank Indonesia (BI).
Shopee claims that currently, 98.1% of the four million active sellers on the Shopee platform are MSMEs. Only 0.1% are cross-border traders.
Local sellers’ products still dominate at Shopee, namely 97%. In detail, sales of MSME products in the ecosystem are 71.4%, cross-country 3%, and the rest are local wholesalers.